Category Archives: Finance

When we think about spending money, budgets often come to mind. Budgets to keep our peaceful sanity. We think of buying things of high quality to get the most joy for our buck. Also, minimalism helps to keep the clutter down, and to stop spending on things we don’t need. But what about the things we do spend on… how can we get better at voting for what we want to exist in the world? Here are three great steps to get you thinking and voting with your money.

What bugs you about the world? What things do you wish were made better, done more efficiently or produced ethically?

For example: I don’t like super cheap department stores. You know the ones that smell like rubber, even the clothing section? The clothes are cheaply constructed and made of plastic fibres. They are super cheap and somewhat fashionable but aren’t durable or stylish. They are less comfortable than natural fabrics and often made in sweat shops abroad. It disturbs my peace of mind that such cheap products are made and supplied to me at a low cost.

What are the effects of your money? When you spend on the poorly made items, the inefficient service or fair trade (but not audited) products, what is the impact? Who is affected and how? What else is involved?

My example: The more clothing I bought from the cheap department store, the more profit it made. The real cost came at the expense of the environment which was mined for petroleum to produce synthetic fabrics, the people (possibly children) who sewed the garments at ultra low wages, the environmental impact and waste of overseas transportation, my higher closet turnover rate and wardrobe dissatisfaction, and the landfill where the clothes ended up.

Consider where you can spend differently and do that. Educate (don’t lecture) others about it and encourage (not judging or chastising) them to do the same.

To continue: If I’m in a shop smelling of rubber I get out into fresh air ASAP. I read the labels on the clothes I buy and aim for 100% natural material. I read the labels to see where the clothes were made, if only to become more aware. I make my own and do with less. I shop at and donate to second hand shops. When I get comments on my clothes I share my philosophy, going only as deep as it feels natural for that conversation.

Where are you spending money that you want to change? What are the far-reaching effects of your voting?

Digital clutter is electronic information that clutters your life. It includes emails, photos, videos, documents, bookmarks, and everything else on your computer. Just like physical clutter, it bogs up your life and ties you down. Clutter has been defined as a confused or disordered state or collection, and more than once by our online minimalist friends*. Basically, clutter is anything that takes away from your peace and joy life. Big or small, physical or electric, relationships or commitments… if it doesn’t bring you peace and joy, it’s clutter.

*Any distraction that gets in the way of a remarkable life [from Unclutterer] /Anything that is disorganized, anything you don’t need or love, too much stuff in too small a space [from Becoming Minimalist]

The benefits of clearing out digital clutter

Get more space. Using gigabytes and terabytes that you may never access is wasteful. You’ll need to upgrade your hardware sooner to keep up with the storage demands.

Save time and be more productive. Unless you have a spectacular search engine and use something like evernote to make all your stuff searchable. Less images and films means you spend your time doing something productive.

Know what you have. A full closet leaves you with nothing to wear so you buy a new outfit. So it is when looking at your digital listings, you might just go back to Google to find anew what you need.

Reduce stress. When there’s less to lose, there’s less to worry about. And if your computer falls over before you’ve backed up, it won’t be so bad.

Enjoy the lighter feeling. It’s the same feeling of freedom we get with decluttering our physical stuff.

Become less attached. If you really need something you deleted, odds are it’s out there on the internet and you’ll be able to find it just as quickly as searching through what you already have.

Evaluate future purchases more carefully. Laying down $15 for an ebook is easy and online marketing is persuasive. Keeping your digital stores clear will help you resist.

How to de-clutter your digital information

Just like decluttering your house, this can take some time, especially if you’ve been hoarding digital information. Unfortunately there’s no visual gratification for the work, so I recommend the clean-slate method.

Archive everything into a folder and date it. This is the equivalent of emptying your kitchen into a box and putting it in the garage. Keep the few things you know you’ll need and move everything else out of your main workspace. This means moving data onto another device such as an external hard drive. You can export emails and bookmarks, then save in the same folder, then delete what’s in your account.

When you need something, move it back.

Let that archived folder wait. In a year, you probably won’t be able to remember what’s in it. Maybe in another year you’ll be ready to delete it.

Don’t collect new clutter. Every time you click on save, or don’t click on delete, ask yourself if you should keep it, toss it or not sure. Keep is for things you really love and actually use, just like physical decluttering. Remember you can probably find it again if you need to, whether it be a quote, e-book, video or photo

Need some inspiration? Read about Ev, who deleted everything… all his professional photos, his hugely successful blog and all personal digital stuff!

Update: My personal example is about music files. I have collected many, many mp3 files. I haven’t even heard many of them. And in the last five years I’ve devoted some hours to sorting and organising them. I even bought a specific external hard drive to store them. But since I acknowledged the reality that I’ll probably never listen to most, I started deleting and only organising the ones I absolutely love, working my way through the unsorted files as my mood for music strikes.

Minimalist jewellery means different things to everyone so let me tell you what I’m talking about: the fewest accessories we can own and use that show our styles and feel good. For me, this is a pair of dangling earrings and, once in a while, knuckles full of silver rings.

Reducing the amount of jewellery we own. Means less maintenance, less storage, less jewellery and associated cases to take when travelling or moving, and less to choose from when dressing.

Having less jewellery to choose from. Means faster choices and therefore less stress, and always being in tune with personal style.

Being free of the urge to buy accessories on the spur of the moment, especially cheap ones. Means saving money, finding long-lasting satisfaction with the purchase, becoming a conscious consumer and being free of the lures of modern marketing.

How do I do it?

If you have nothing, go with it.

If you buy, choose a good quality piece of jewellery. It will look great and last a long time. This is going to be an investment piece or two or three to last you the rest of your life.

If you have loads, reduce your jewellery wardrobe. Cull the pieces that don’t fit your style statement. Sentimental? Keep a couple, photograph the rest and pass them to people who will love and use them daily.

When something breaks or wears, replace it with good quality that fits your style. (See point 2, If you buy)

The biggest “how do I do it”

Resisting the lure of today’s seductive marketing comes with practice. There are really two steps. The first is to know your style to the point where nothing flashy tempts you unless it’s really “you.” The second is to not buy, even when you feel the desire. Not buying is a destination for which minimalists reach. We buy less and less, learning and internalising that a purchase won’t satisfy any deep need.

Let me repeat this because it’s important: A diamond will not complete you. Another piece of jewellery will not satisfy any need you feel inside you.

There’s no denying the delicious feeling of a heavy ring or a jingly bracelet. How lovely to see the light wink and rainbow through a perfectly cut crystal. Try this: stop wearing it. Go without any jewellery for awhile instead of buying something new. It’s refreshing to go natural, and the jewels feel all the more special after a couple weeks or more of not wearing them.

I’ve begun to learn about personal finance in the last couple years. One basic thing that screams, “IMPORTANT!” at me is cash flow. Cash flow is the amount of money you’re left with at the end of every month. So if you receive 50,000 a year and spend 40,000 you have a positive cash flow of 10,000.

Steps to financial freedom

A couple months ago I wrote about knowing where all your money is. Not the balance in each account, but knowing where the money comes in, goes out, and sits tight. The next step is watching where your money is moving, and how much of it. At its simplist, the goal is to have 3 numbers: money in, money out, and the difference. Tracking it monthly is a great way to start.

This isn’t a budget or a plan. It’s not a slap on the wrist or a pat on the back. The point of the exercise is not to draw fancy charts or feel bad about spending. It’s simply a picture of where your money moves each month.

Why you need to make the effort

Rich people track their cash flow. People who don’t track their cash flow have trouble sleeping. There’s no peace and joy in that! And just the process of being aware, not even putting in any extra effort, can bring change and raise your cash flow. I’ve started walking more to save buying fuel for the car. I’ve been making coffee at home rather than stop at the cafe. These are only small things but they feel easier because I see that bottom line every month and know it makes a difference.

Note: This can be scary. I still find it somewhat gulp-inducing to tally the monthly figures because it’s shocking how much the small stuff adds up. But the only way out is through so please take a deep breath and try it.

Let’s keep this simple

Step 1: The most work involved is keeping track of every cent you spend. I save my receipts and a couple times a week, I add them to running totals in a paper workbook. You could use your phone to record the amounts you spend, or just the back of a business card in your wallet. Even if it’s a small amount for parking or a tenner you lent a friend, add it in.

Step 2: Use a full size sheet of paper or an electronic program if you want. At the end of the month write down 4 things:

The month

The money in: how much came to you in wages, interest, dividends, gift certificates, bills you find on the street and other income.

The money out: how much you spent on daily purchases plus bills and unusual expenses (insurance, vacation, deposit payments, etc). Don’t include cash you withdrew from the bank, only what you spent.

The cash flow: money in minus money out. This can be a negative number. Don’t get too attached to it, it’s only a snapshot of finances in the last 30 days.

That’s it. You can categorise expenses, which gives less intimidating subtotals but highlights your bad spending habits. Do try to stay under 15 major categories, otherwise they become meaningless categories of one or two things each. Just remember, the monthly cash flow is a grand total, so add up all the categories for the bigger number.

I discovered furoshiki a couple years ago. As a minimalist, I use it all the time. Forget about packing cubes while travelling, I bundle with silk scarves. A gym bag to lug all my gear for dance class? Nope, a couple quick knots in my 1-metre-square fabric and it’s covered.

What is furoshiki?

Furoshiki is a Japanese style of fabric wrapping, originally used to bundle clothes in the public baths. Now people use it for bundling, wrapping gifts, carrying books and bottles, and decoration. Check out wikipedia for more history.

Two things: re-use and environment.

Minimalists abhor uni-task items. That is, we don’t like to own things which are used for only one purpose. The packing cubes I mentioned above are a prime example. They have become popular in the last few years because they simplify suitcase organisation. But they are useless beyond travel. A cloth can be used to wrap like items, and cinched to compress them if needed. The same cloth can be re-used in many ways: as a book bag, scarf, napkin, backpack, blanket for the kids, wine bottle wrap, shopping bag, handbag, neck or head wrap for warmth, cape for sun protection, makeshift sitting mat and more.

Re-use saves the environment because you don’t need to purchase (so nobody needs to manufacture) bags specific to the task. But even better, you can use furoshiki instead of plastic bags (or even the reusable cloth bags) when shopping. In fact, the environment minister of Japan began promoting furoshiki to the general population for this one reason: to cut back on plastic shopping bags.

The stylish minimalist in me has one more point. Your furoshiki cloth is in your colour scheme and looks great no matter what you’re carrying! Plus you can reuse the cloth as a neck or head wrap for warmth (or a makeshift sitting mat) if needed and still look fantastic. Saves you cash while looking great.

How do you do it

First you need the cloth. There are beautiful and functional styles available in every price range. You can buy online or make your own by going to the local fabric shop and buying a metre or so. Even if you can’t sew, you can cut the material to size and leave the edges raw, depending on the type of fabric. I use this unsewn option as well as square silk scarves.

Once you have the furoshiki, follow the simple pictoral instructions for tying. Pictures and videos are incredibly helpful, moreso than I would be by trying to explain it to you in writing. So below are a couple links to get you started. You can always search for furoshiki on the internet for plenty of examples. If you’re so inclined, learn a few boating knots so they are easier to undo. I ruined one scarf with a double knot that I left in for months.

You may have noticed a couple links on the homepage that go to websites about money (Early Retirement Extreme and Diva Money Club*). If you check out the About section of this blog, you’ll see that stylish minimalism includes all areas of life: environment, career, finances, health, family, friends, romance, personal growth and recreation. You can apply minimalism to your finances, bringing peace and joy into your life. Today I want to talk about where to start.

I won’t be convincing you to move all your banking online — that’s a personal preference.

Where is your money?

Applying minimalism to your finances is similar to the way you apply it in other areas of your life. There can be clutter of information, bills, statements, e-documents, cash, cards, cheques, receipts, accounts…. and so on. Where are yours? Do you have coins in ten different piggy banks? Receipts bulging out of drawers? So many accounts you can’t remember them all? Do you know where all your finance information is and can you access it timely?

Whether something is for reference or for action, knowing where it is and being able to easily access it is going to make life easier.

Rich people, poor people, people in debt and everyone in between should know where they are, financially. You don’t have to keep a fancy book or spreadsheet. All you need is to know the locations and amounts of your money (incoming and outgoing). And let the clutter go.

Why is it important?

Once you have minimised, there won’t be frantic scrambles or duplication. Just having the clutter gone can save money. And once you know where things are, you can make a plan for improvement – whether that be to get out of debt or to get richer. Knowing where your money is saves you time to access, it saves you money with no late fees, and it allows you to plan. You cannot plan how to reach a destination if you don’t know where you are. You cannot meet deadlines if the information escapes you.

How can you do it?

Please note, I am not a financial adviser. But as a minimalist, I suggest keeping a master list of accounts. You can keep it at the back of your address book, in an online text file, in your head… as long as it is a defined list. A nickname and number for each account should be sufficient. To make sure you’ve got everything on the list, you can leave it out for a month and add to it as you use your money.

Make a master list of all accounts. Note them as paper bills, online access, accounts with a card, etc.

Gather all papers around your house, bags, car, office, wherever.

As you find new accounts, add them to your list.

Recycle, shred or otherwise get rid of papers you no longer need. The bank can always send you replacements if you need them. Read your latest account agreement then recycle it. You do not need your bank’s fee change notices from the last 10 years!

File, if needed. If you like, you can track most things online and only keep the odd paper statement (or scan it and throw the paper away).

Keep the list so you can update it as accounts change, and refer to it as you work on your financial plan.

If you’re underwater or have been spending without budgeting, this may be scary. Please don’t be scared. You don’t need to change your financial behaviours right now. We’re just finding out where everything is.

I’ve been daydreaming about winning the big lotto. What would I do with 30 million, 50 million, more? I even bought a ticket just in case. It didn’t win but it got me thinking about what I would do if I had won.

What is win the lottery lifestyle?

Living a win-the-lottery-lifestyle means living a similar life to what you would if you won the lottery. Obviously there will be some differences when it comes to money. You wouldn’t give up your job or buy a new 50 foot boat.

The key question becomes: what comes after the luxury cruise and diamond jewellery? After you finish your year long vacation and travel the world? After you do all the things money can buy, what would you do all day long?

The answer is something you cannot buy.

The answer ties into your life vision. What you would do after the money is something you can start now. If you want to become fluent in Portugese, you don’t need to move to Portugal. Borrow a CD from the library. Befriend your Portugese coworker. Take one evening a month to visit your local Portugese/English language group.

The projects I do now in my spare time I would not stop if I won the lottery. If I won millions my life would certainly change. But I am already enjoying my life without buying the lotto ticket.

Think long and hard about what you would do after the money stuff.

Then start doing it. Or a variation of it.

Wouldn’t it be something to win the jackpot and tell the reporters, “Oh, I’ve already been living such a great life, this is just a bonus.”